Bonnot v. Congress of Independent Unions Local# 14

• Decision Date: 04 May 1964
• Docket Number: No. 17459.,17459.
• Parties: J. C. BONNOT, d/b/a Bonnot Construction Company, Appellant, v. CONGRESS OF INDEPENDENT UNIONS LOCAL #14, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

331 F.2d 355 (1964)

J. C. BONNOT, d/b/a Bonnot Construction Company, Appellant, v. CONGRESS OF INDEPENDENT UNIONS LOCAL #14, Appellee.

No. 17459.

United States Court of Appeals Eighth Circuit.

May 4, 1964.

Paul S. Kuelthau, of Moller, Talent & Kuelthau, St. Louis, Mo., argued for appellant and filed brief with Harry H. Kay, and Robert J. Quigley, Eldon, Mo.

James K. Almeter, Alton, Ill., argued for appellee and filed brief with Joseph R. Nacy, Jefferson City, Mo.

Before VOGEL, MATTHES and BLACKMUN, Circuit Judges.

BLACKMUN, Circuit Judge.

This is another case which raises the issue of contractual arbitrability.

The Congress of Independent Unions, Local #14 (the union) brings the action under § 301 of the Labor Management Relations Act, 1947, 29 U.S.C. § 185, against J. C. Bonnot, d/b/a Bonnot Construction Company (the contractor).

The union's complaint alleges that the contractor, continuously since 1960 and contrary to the terms of their collective bargaining agreement, has failed and refused to recognize the union as the exclusive bargaining agent for the contractor's employees and has failed and refused to require membership in the union as a condition of employment. Damages consisting of the union's loss of initiation and regular dues are claimed. Relief by way of injunction from further violation is also requested. The complaint does not allege that the asserted violations were processed through the contract's grievance procedure.

The parties' agreement is an exhibit attached to the complaint. It provides that "The Contractor agrees to recognize the Union as the sole and exclusive collective bargaining agency for all his employees" and that his employees "shall maintain their membership in the Union as a condition of employment". Article 5, entitled "Grievances", reads:

"Section 1. The Union and Contractor agree that there shall be no strikes, lock-outs, tie-ups or legal proceedings without first using all possible means of settlement, as provided in this Agreement, of any controversy which might arise.

"Section 2. A grievance shall include any difference of opinion between the Contractor and any union member over the interpretation of this Agreement. * * *"

Then follow conventional provisions as to the time within which a grievance is to be brought to the contractor's attention, as to consideration of the matter by the contractor and union representatives and

"In the event the two parties do not agree after the steps outlined in paragraph 3 above, then either party may request arbitration and follow the following procedure:

"* * *."

The procedure specified is a common one providing for the appointment of arbitrators and for the finality of the arbitration; its details are not pertinent here.

The contractor, before filing his answer, promptly moved to dismiss the complaint on the ground that it stated no "claim upon which relief can be granted". This motion was denied. In an unreported memorandum in support of that ruling, the district court made the assumption that the motion was based upon the union's failure to exhaust the contract's arbitration procedure but went on the hold that the import of the agreement's language

"* * * is to include within the arbitration procedure only those disagreements involving the operation of the contract, and it cannot be said to include the requirement that civil actions between employer and the union for damages for breach of the essence of the agreement be arbitrated."

After the denial of the motion to dismiss, the contractor filed his answer. Later he moved for reconsideration of the denial of the dismissal motion. This was upon the authority of Drake Bakeries Inc. v. Local 50, American Bakery etc., Workers, 370 U.S. 254, 82 S.Ct. 1346, 8 L.Ed.2d 474 (1962), not theretofore cited to the court. In a supplemental memorandum, also unreported, the district court noted that the contractor and an intervening union by their answers had asserted that the bargaining agreement was wholly invalid. It observed that in Drake there was no allegation that the contract itself was illegal and invalid. From this it reasoned that "If the contract is invalid, the arbitration clause is invalid"; that arbitration is dependent upon the consent of the parties; and that basic questions, such as the existence of the contract or its breach, "which would amount to a denial of its existence are not susceptible to arbitration under the provisions of this alleged agreement." The motion to reconsider was therefore denied. The court, however, granted the contractor's motion for certification under 28 U.S.C. § 1292(b) for an interlocutory appeal. This court permitted the appeal.

There may well be, of course, a logical inconsistency between the contractor's reliance, in his motions to dismiss and for reconsideration, upon the efficacy of the bargaining agreement and its prescribed arbitration procedure, on the one hand, and, on the other, his assertion in his answer, of the contract's illegality and ineffectiveness. For purposes of the contractor's motion to dismiss, however, the trial court and this court are to accept as true the well pleaded allegations of fact contained in the complaint. Polk Co. v. Glover, 305 U.S. 5, 9, 59 S.Ct. 15, 83 L.Ed. 6 (1938); Creswell-Keith, Inc. v. Willingham, 264 F.2d 76, 81 (8 Cir. 1959); McCleneghan v. Union Stock Yards Co., 298 F.2d 659, 662 (8 Cir. 1962). This is to be done without reference or concern as to a subsequent responsive pleading chronologically compelled by the denial of the motion to dismiss. See Polk Co. v. Glover, supra, p. 9 of 305 U.S., 59 S.Ct. 15, 83 L.Ed. 6; Department and Specialty Store Employees' Union, Local 1265 v. Brown, 284 F.2d 619, 623 (9 Cir. 1961).

With our view so confined, the case at once falls into that developing area of labor law governed by Textile Workers Union of America v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957) and its two companion cases, General Electric Co. v. Local 205, United Electrical etc., Workers, 353 U.S. 547, 77 S.Ct. 921, 1 L.Ed.2d 1028 (1957) and Goodall-Sanford, Inc. v. United Textile Workers, 353 U.S. 550, 77 S.Ct. 920, 1 L.Ed.2d 1031 (1957); by the trilogy of United Steelworkers of America v. American Mfg. Co., 363 U.S. 564, 80 S.Ct. 1343, 4 L.Ed.2d 1403 (1960), United Steelworkers of America, A.F.L.-C.I.O. v. Warrior & Gulf Nav. Co., 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960), and United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960); by the later trilogy of Sinclair Refining Co. v. Atkinson, 370 U.S. 195, 82 S.Ct. 1328, 8 L. Ed.2d 440 (1962), Atkinson v. Sinclair Refining Co., 370 U.S. 238, 82 S.Ct. 1318, 8 L.Ed.2d 462 (1962), and Drake Bakeries, Inc. v. Local 50, American Bakery etc. Workers, supra, 370 U.S. 254, 82 S. Ct. 1346, 8 L.Ed.2d 474 (1962); and by John Wiley & Sons v. Livingston, 376 U.S. 543, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964). Our analysis of these opinions convinces us that the contractor's motion to dismiss here should have been granted.

Lincoln Mills and its companions clearly establish the principles, pp. 451 and 455-456 of 353 U.S., pp. 915, 917 of 77 S. Ct., 1 L.Ed.2d 972, that § 301 "authorizes federal courts to fashion a body of federal law for the enforcement of these collective bargaining agreements and includes within that federal law specific performance of promises to arbitrate grievances under collective bargaining agreements"; that the statute "expresses a federal policy that federal courts should enforce these agreements on behalf of or against labor organizations and that industrial peace can be best obtained only in that way"; and that "the substantive law to apply in suits under § 301(a) is federal law, which the courts must fashion from the policy of our national labor laws".

In the Steelworkers trilogy we find renewed emphasis on arbitration as a stabilizing factor in effectuating national labor policy. It was there said, p. 578 of 363 U.S., p. 1351 of 80 S.Ct., 4 L.Ed.2d 1409, that "arbitration is the substitute for industrial strife"; that under collective bargaining agreements it "is part and parcel of the collective bargaining process itself"; that "the grievance machinery under a collective bargaining agreement is at the very heart of the system of industrial self-government"; that "Apart from matters that the parties specifically exclude, all of the questions on which the parties disagree must therefore, come within the scope of the grievance and arbitration provisions of the collective agreement", p. 581 of 363 U.S., p. 1352 of 80 S.Ct., 4 L.Ed.2d 1409; that, although the courts have "the duty of determining whether the reluctant party has breached his promise to arbitrate" and, thus, "arbitration is a matter of contract", nevertheless, "An order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute"; that "Doubts should be resolved in favor of coverage", pp. 582-583 of 363 U.S., pp. 1352, 1353, of 80 S.Ct., 4 L.Ed.2d 1409; and that this is particularly so where "the exclusion clause is vague and the arbitration clause quite broad", p. 585, of 363...